Industry Insights

Salary Negotiation and the Gender Gap

Most estimates from labour economists put the gender pay gap at 10% to 20%. As to why equally qualified women doing the same job are paid less than men, the explanation often cited is women’s failure to negotiate higher pay. This explanation is research-based; however, using a more recent and detailed data set, a new study finds that women ask for raises as often as men, but are less likely to get them. Specifically, women who asked received a raise 15% of the time, versus 20% of the time for men. “While that may sound like a modest difference, over a lifetime it really adds up,” the study’s authors point out.

For the study, Benjamin Artz of the University of Wisconsin, Amanda Goodall of Cass Business School and Andrew J. Oswald of the University of Warwick used a random sample of 4,600 male and female employees across 800 workplaces. They used a sample from Australia, as it has unusually good information regarding “asking behaviour” as well as fairly broad representation of different cultures, including British, Southeast Asian, American and European.

Beyond the basic question of who is and isn’t asking for raises, participants were surveyed in detail about their motives, behaviour, and histories with regards to “asking behaviour.” Investigating the claim that women are less assertive when asking for raises because they are wary of damaging workplace relationships, the study found no evidence. Rather, it found that women and men are equally concerned about the impact on relationships, with 14% of both groups reporting that this concern has prevented them from asking.

In an article for Harvard Business Review on their gender gap research, Artz, Goodall and Oswald cite the nuanced findings of Andreas Leibbrandt and John List, which highlight a subtle difference between men and women asking for raises: When participants were told that wage negotiation was permitted, there was no disparity between men and women. However, when the “rules of wage determination” were unclear, they found that men tended to negotiate higher pay.

Artz, Goodall and Oswald conclude that “women do ask” – and that this assertion holds true in both large and small companies, regardless of the woman’s level of education or length of job tenure. These findings contradict earlier research on the subject, but this does not necessarily mean that women’s asking behaviour has changed over time. “Perhaps women have always asked more than they’ve gotten credit for, and more detailed data just allows us to finally see it. The bottom line is that the patterns we have found are consistent with the idea that women’s requests for advancement are treated differently from men’s requests.”